Government Approves ₹2,585 Crore Small Hydro Scheme Focused on 1,500 MW Capacity Build-Out

The Union Cabinet has approved a small hydro power development scheme with a total outlay of ₹2,585 crore. The scheme will be implemented over 5 years, from FY27 to FY31. It targets the addition of around 1,500 MW of capacity through projects in the 1 MW to 25 MW range. 

The programme focuses on expanding renewable capacity through smaller installations, particularly in areas where large projects may not be feasible. 

Support for States and Regions 

The scheme provides differentiated financial support based on location. Projects in North Eastern states and border districts will receive up to ₹3.6 crore per MW or 30% of project cost, capped at ₹30 crore per project. 

For other states, the support is set at ₹2.4 crore per MW or 20% of project cost, with a ceiling of ₹20 crore. Most of the allocation, ₹2,532 crore, has been set aside for these projects. 

Current Capacity and Potential 

India currently has about 5,100 MW of installed small hydro capacity across 1,196 sites. At the same time, the identified potential stands at around 21,000 MW across 7,133 locations. 

The scheme is for narrowing this gap by encouraging development in regions with untapped capacity, including hilly and remote areas. 

Investment and Project Pipeline 

The programme is expected to draw investments of nearly ₹15,000 crore into the sector. In addition, ₹30 crore has been allocated to support preparation of detailed project reports for around 200 projects. 

This is intended to build a pipeline for future capacity addition beyond the current scheme period. 

Implementation and Employment 

Most projects under the scheme are expected to follow a run-of-river model, which does not require large reservoirs. This reduces the need for extensive land acquisition and limits displacement. 

The construction phase is estimated to generate around 51 lakh person-days of employment, with further jobs likely in operations and maintenance. 

Read More: PM Internship Scheme Records 7,292 Exits; Monthly Stipend Raised to ₹9,000! 

Conclusion 

The scheme targets expansion of small hydro capacity in areas with identified potential. It combines financial support with project pipeline development and is expected to contribute to incremental capacity addition over the next 5 years. 

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